Professional Tax: Professional tax is imposed by the state governments. Its rate varies in every state.
Professional Tax or professional tax is that which people earning more than a certain limit have to pay. It is imposed by the state governments. For this reason income is different from tax. However, you can claim exemption on professional tax paid in a financial year in ITR.
Which people have to pay professional tax
Professional tax has to be paid by employees, businessmen, freelance, doctors and people earning more than a certain limit in other professions. Let us tell you, under Article 276 of the Constitution of India, states have the right to make laws related to profession, business and employment. Professional tax is not imposed in all states.
Professional tax rate
Since it is a tax imposed by the states, its rate varies from state to state. According to Article 276, under no circumstances can it exceed Rs 2,500. Whereas, if we talk about states, professional tax is collected in Karnataka, Andhra Pradesh, West Bengal, Maharashtra, Tamil Nadu, Telangana and Kerala.
Who has to pay professional tax?
If you are employee and work in such state. Where professional tax is levied, your employer has to deduct professional tax from the salary and deposit it. At the same time, if you do freelancing etc. then you will have to register yourself with the authority of your state and will have to deposit tax if the income is beyond a limit. Professional tax is collected by the Commercial Tax Department of State Governments. Being a state tax, its process is different in every state and you can deposit it offline and online.
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